March 5, 2015

VALUATION WATCH: Overvalued stocks now make up 57.85% of our stocks assigned a valuation and 19.19% of those equities are calculated to be overvalued by 20% or more.  Eleven sectors are calculated to be overvalued--with three at or near double digits.

--A Taxing Situation

Effect of Intuit Turbo Tax Hack Still Unclear

Intuit's (INTU) mission is to revolutionize how people manage their financial activities. The company's objective is to greatly expand the world of electronic finance. Electronic finance encompasses three types of products and services: desktop software products that operate on customers' personal computers to automate financial tasks; products and services that are delivered via the Internet; and products and services that connect Internet-based services with desktop software to enable customers to integrate their financial activities.

The company was forced to suspend electronic filings of state tax returns via its flagship product Turbo Tax last month due to a surge in fraudulent activity. While the moratorium only lasted 24 hours, today's Wall Street Journal reports that many questions remain about the incident. Both the IRS and the FBI are looking into the matter, but the company CEO Brad Smith remains confident it was not hacked or breached.

If that is true, then the implication is that hackers obtained passwords or other personal data via other data breaches or exploits of individuals and then used it the purloined data at Turbo Tax because--as by far the largest electronic filer-- most users would be using it for their taxes. It's another caution for users who like to keep a log in and password for multiple accounts.

So far, it is tough to find any real negative result for Intuit, they were already offering a promotion where state tax filing was free--which some speculated is the reason the hackers went after state tax refunds--and they have implemented a variety of changes designed to stop the fraud.

ValuEngine continues its HOLD recommendation on INTUIT INC for 2015-03-04. Based on the information we have gathered and our resulting research, we feel that INTUIT INC has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Sharpe Ratio but UNATTRACTIVE Book Market Ratio.

NOTE: The author uses Turbo Tax for electronic filing of his taxes and has had no problems this year or any other.

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Read our Complete Detailed Valuation Report on INTUIT HERE.

Below is today's data on INTU:

ValuEngine Forecast
	Target Price*	Expected Return
1-Month	97.20	-0.26%
3-Month	96.95	-0.51%
6-Month	95.62	-1.88%
1-Year	94.42	-3.11%
2-Year	113.57	16.54%
3-Year	79.55	-18.36%

Valuation & Rankings
Valuation	46.05% overvalued	Valuation Rank(?)	6
1-M Forecast Return	-0.26%	1-M Forecast Return Rank	32
12-M Return	20.44%	Momentum Rank(?)	82
Sharpe Ratio	1.24	Sharpe Ratio Rank(?)	98
5-Y Avg Annual Return	22.09%	5-Y Avg Annual Rtn Rank	91
Volatility	17.88%	Volatility Rank(?)	86
Expected EPS Growth	-5.88%	EPS Growth Rank(?)	19
Market Cap (billions)	26.97	Size Rank	96
Trailing P/E Ratio	38.22	Trailing P/E Rank(?)	36
Forward P/E Ratio	40.60	Forward P/E Ratio Rank	10
PEG Ratio	n/a	PEG Ratio Rank	n/a
Price/Sales	5.89	Price/Sales Rank(?)	16
Market/Book	56.30	Market/Book Rank(?)	3
Beta	0.77	Beta Rank	64
Alpha	0.13	Alpha Rank	82

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